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MENA gas investments to total US$75bn over next five years: APICORP

Gas

The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, has estimated that gas investments in MENA for the period 2021-2025 are expected to total US$75bn – US$9.5bn less than the previous outlook

The decline is attributed to the completion of several mega projects in 2020 and countries being more cautious about new project commitments in an era of gas overcapacity.

Qatar, Saudi Arabia, and Iraq are the top three MENA countries in terms of committed gas investments. This is owed to Qatar’s North Field East megaproject, Saudi Arabia’s gas-to-power drive and the massive Jafurah unconventional gas development – which is poised to make the kingdom a global blue hydrogen exporter – and Iraq’s gas-to-power projects and determination to cut flaring and greenhouse gas emissions.

Planned investments meanwhile held relatively steady at US$133bn for 2021-2025, signalling the region’s appetite for resuming its natural gas capacity build-up – particularly the ambitious unconventional gas developments in Saudi Arabia, UAE, Oman, and Algeria – once macro conditions improve.

Petrochemicals investments

Planned investments in the MENA petrochemicals sector are forecast to increase to US$109bn in 2021-2025, a US$14.2bn jump compared to last year’s outlook. By contrast, committed investments dipped by US$7.7bn to around US$12.5bn due to the completion of several mega projects in 2020.

Despite MENA petrochemical markets seeing an overall improvement in demand owing to the increased consumption of basic materials as vaccination drives continue and economies recover, some MENA committed petrochemical investments are nonetheless being re-evaluated and rationalized due to fiscal strains, capital discipline and cost efficiencies and evolving market dynamics.

MENA Energy Investment Outlook 2021-2025

The overall planned and committed investments in the MENA region will exceed US$805bn over the next five years (2021–2025) – a US$3bn increase from the US$792bn estimates in last year’s five-year outlook.

The report, titled MENA Energy Investment Outlook 2021-2025, attributes this modest rise to four factors: A strong confidence in the rebound of global GDP, rising energy demand, the comeback of Libyan projects – which alone accounts for around US$10bn in planned projects – and the accelerated pace of renewables in the region. Per current estimates, MENA will add 3GW of installed solar power capacity in 2021 alone – double that of 2020 – and 20GW over the next five years.

Ahmed Ali Attiga, CEO of APICORP, said, “APICORP’s MENA Energy Investment Outlook 2021-2025 indicates that energy industries are entering a period of relative stability in terms of investments as most MENA countries return to GDP growth in 2021 and the energy transition showing no signs of slowing down. We anticipate a slow but steady recovery of the energy sector from the fallout of the COVID-19 pandemic, supported by continued investment from the public sector and an upswing in demand.”

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